<PAGE>

                            PURCHASE AND SALE AGREEMENT

  THIS AGREEMENT, effective as of the 1st day of January 2000, is made and
entered into by and between RAY W. WILLIAMS as Seller ("SELLER"), and TIPPERARY
CORPORATION as Buyer ("BUYER").

  1.   BASIS OF AGREEMENT.  SELLER and BUYER's wholly-owned subsidiary,
Tipperary Oil & Gas Corporation, and others, are non-operators under that
certain Joint Operating Agreement dated May 15, 1992 between non-operators and
Tri-Star Petroleum Company, as Operator (the "Operating Agreement"), relative to
the development of the coalbed methane gas project known as the Comet Ridge
Project, located in the State of Queensland, Australia.  The Operating Agreement
is attached hereto respectively as Exhibit "A."  SELLER desires to sell all of
his interest in the contractual and other rights, title and interest, of any
nature whatsoever, arising under or created by the Operating Agreement,
including, without limitation, all contract rights and all undivided interest in
any real or personal property which SELLER owns or has the right to acquire
under the terms of the Operating Agreement presently or in the future, and BUYER
desires to purchase all of SELLER's contractual and other rights, title and
interest of any nature whatsoever arising under or created by the Operating
Agreement, including, without limitation, all contract or  other rights of any
nature and any undivided interest in any real or personal property which SELLER
owns or has the right to acquire under the Operating Agreement presently or in
the future, all in accordance with the terms and conditions of this Purchase and
Sale Agreement (the "Agreement").

  2.   ASSETS TO BE PURCHASED AND SOLD.  Subject to the terms set forth in
this Agreement, and the terms and conditions of the Operating Agreement, SELLER
agrees to sell to BUYER and BUYER agrees to buy from SELLER the following
undivided percentage of interest in the assets and properties hereinafter
described, as follows:

                            A.             B.                    C.
                                      In Leasehold          In Acquisition
                           In       Ownership & Lease   Drilling, Development,
                       Production  Operating Expenses  Workover & Capital Costs
                          (%)             (%)                    (%)

Before Project Payout  1.898437500     2.109375000              2.0

After Project Payout   2.115000        2.35                     2.35


       (a)  SELLER's undivided interest, if any, in and to, and/or SELLER's
       right to acquire an undivided interest in and to the Authority to
       Prospect 526 attached as Exhibit "B" hereto, and the ATP attached as
       Exhibit "B"


<PAGE>

       to the Operating Agreement, and any extension, renewal or replacement
       of any ATP, howsoever denominated (the "ATP");

       (b)  SELLER's rights, if any, to reacquire any acreage which had
       comprised a part of the ATP but was relinquished by the Operator as a
       part of, or in connection with, a scheduled contraction of the ATP,
       and/or any other acreage which was at any time a part of the ATP but
       lapsed or was relinquished for any reason;

       (c)  SELLER's undivided interest, if any, in and to, and SELLER's
       right to acquire an undivided interest in and to the petroleum leases
       and applications for petroleum leases listed and described on Exhibit
       "C" attached hereto (the "Leases") and applications for petroleum
       leases;

       (d)  SELLER's undivided interest, if any, in and to, and SELLER's
       right to acquire an undivided interest in and to Pipeline License No.
       27 described on Exhibit "D" and attached hereto and any connecting
       pipeline and/or  gas gathering systems;

       (e)  SELLER's undivided interest, if any, in and to, and SELLER's
       right to acquire an undivided interest in and to all permits,
       licenses, leases, servitudes, rights-of-way, easements, pipeline
       licenses and any other tenements or similar rights associated with the
       ATP and Leases and the operation of the ATP and Leases, whether
       specifically enumerated herein and whether presently existing, applied
       for, pending, created, issued or accrued, or applied for, created,
       issued or accrued in the future;

       (f)  SELLER's undivided interest, if any, in and to, and SELLER's
       right to acquire an undivided interest in and to the wells listed and
       described on Exhibit "E" (the "Wells") and attached hereto, including
       all formations and depths within or below the wellbore, whether or not
       presently productive;

       (g)  SELLER's right, if any, to acquire an interest in any wells to be
       drilled in the future on the acreage described by the ATP or any
       extension, renewal or replacement of the ATP, howsoever denominated;

       (h)  SELLER's undivided interest, if any, in and to, and SELLER's
       right to acquire an undivided interest in and to, all personal and
       mixed property located on the lands covered by the ATP and Leases and
       used in operations conducted on same, whether located on or off the
       wellsites, the Leases or the acreage described by the ATP;

       (i)  SELLER's undivided interest in and to, and the right to acquire
       an undivided interest in and to, any and all gas purchase and sale
       agreements,

                                         2

<PAGE>

       crude purchase and sale agreements, gas pipeline agreements,
       volumetric or other production payments of any nature, leases of
       equipment or facilities and any and all other agreements and rights
       which are (i) appurtenant to the ATP, Leases or Wells, or (ii) used or
       held for use in connection with the ownership or operation of the
       Wells or with the production, treatment, sale or disposal of water,
       hydrocarbons, or associated substances produced, used or disposed of
       in connection with the Wells, ATP or the Leases;

       (j)  To the extent that such may be lawfully transferred, all of
       SELLER's tax benefits or tax deductions under the laws of Australia,
       the State of Queensland or any municipality thereof, whether or not
       presently accrued, owned by or vested in SELLER, including, without
       limitation, any tax benefits or deductions which may be lawfully
       transferred to BUYER under Australia's Income Tax Assessment Act 1997,
       or any applicable predecessor to such Act.  This shall be a continuing
       obligation;

       (k)  All of SELLER's right or rights to enforce its contract rights,
       title, interests of any nature, covenants, representations, warranties
       or other rights of any nature, if any, which SELLER is or may in the
       future be entitled to enforce against SELLER's predecessors-in-title;

       (l)  All of SELLER's right, title and interest, if any, under any Deed
       or Deeds of Confirmation of Producing License executed by Tri-Star
       Petroleum Company in favor of SELLER, as Drilling Participant;

       (m)  All of SELLER's right, title and interest, if any, under any Deed
       or Deeds of Charge executed by Tri-Star Petroleum Company in favor of
       SELLER, as Chargeholder;

       (n)  All of SELLER's contract rights or other rights under the
       Operating Agreement of any nature whatsoever, whether express or
       implied, whether presently existing or vested in SELLER or arising in
       the future, whether specifically enumerated above, including, but not
       limited to, all choses-in-action.

The rights and interests described in paragraphs (a) through (n) above are
collectively referred to in this Agreement as the "Assets."

  3.   THE EFFECTIVE DATE.  The effective date of the purchase and sale, for
all purposes, shall be the 1st day of January, 2000, at 12:01 a.m., Greenwich
Mean Time plus ten, local time, Brisbane, Australia ("Effective Date").


                                         3

<PAGE>


  4.   PURCHASE PRICE AND CLOSING DATE.  The purchase price for the Assets
shall be  two million seventy three thousand two hundred eighty one and no cents
($2,073,281.00).  The purchase price shall be payable, at BUYER's option,
entirely in cash at closing; or by a combination of cash and BUYER's common
stock, as follows:  one million three hundred and fifty nine thousand thirty six
dollars and no cents ($1,359,036.00) in cash at closing and four hundred forty
six thousand four hundred three (446,403) shares of BUYER's common stock valued
at $1.60 per share.  PROVIDED HOWEVER, notwithstanding the foregoing, all of
BUYER's obligations under this Agreement are contingent upon the approval of the
issuance of additional shares of BUYER's common stock at its annual
shareholder's meeting to be held on January 25, 2000.  Should such authorization
not be received, BUYER, at its option, may elect to pay the entire purchase
price in cash at closing.  The sale shall be completed at the offices of the
attorneys for BUYER or a place to be mutually agreed upon by BUYER and SELLER,
on or before thirty (30) days from the date of the execution of this agreement
by both BUYER and SELLER (the "Closing Date").  At the closing, SELLER shall
deliver to BUYER a fully executed assignment and conveyance in the form attached
hereto as Exhibit "F."  The purchase price, or cash portion of the purchase
price, as the case may be, shall be paid to SELLER by cashier's check or wire
transfer, at BUYER's option, as of the Closing Date.

  5.   REGISTRATION RIGHTS AGREEMENT.     If any of the purchase price as set
forth above is paid in shares of common stock of BUYER, SELLER shall, as of the
Closing Date, enter into a Registration Rights Agreement in the form attached
hereto as Exhibit "G."

  6.   POST-CLOSING ADJUSTMENTS.     On or before sixty (60) days after the
Closing Date, BUYER AND SELLER shall undertake to agree with respect to the
adjustments or payments that were not fully and finally determined as of the
Closing Date, and the amount due from BUYER to SELLER, or SELLER to BUYER, as
the case may be.  SELLER shall provide BUYER access to such of SELLER's records
as may be reasonably necessary to a determination of post-closing adjustments.
Payment by BUYER or SELLER shall be made in immediately available funds within
thirty (30) business days of agreement.  If the post-closing adjustment has not
been agreed upon within the time period set forth herein, either party may seek
to enforce any rights it claims hereunder.

  7.   MUTUAL REPRESENTATIONS AND WARRANTIES.  BUYER and SELLER each
represents and warrants to the other that:

       (a)  The person executing this Agreement and the transactions
       contemplated hereby has all authority necessary to enter into this
       Agreement and to perform all of the obligations hereunder;

       (b)  The execution, delivery and performance of this Agreement and the
       transactions contemplated hereby will not:

                                         4

<PAGE>


            (i)  violate or conflict with any provision of any Certificate of
            Incorporation, Corporate By-Laws, partnership agreement or
            limited partnership agreement or other governing document of any
            nature;

            (ii) result in the breach of any term or condition of, or
            constitute a default or cause the acceleration of any obligation
            under any agreement or instrument to which it is a party or by
            which it is bound;

            (iii)     violate or conflict with any applicable judgment,
            decree, order, permit, law, rule or regulation, state or federal,
            of the United States of America.

       (c)  This Agreement has been duly executed and delivered on its
       behalf, and at the closing all documents and instruments required
       hereunder will have been duly executed and delivered.  This Agreement,
       and all such documents and instruments shall constitute legal, valid
       and binding obligations enforceable in accordance with their
       respective terms, except to the extent enforceability may be impacted
       by bankruptcy, reorganization, insolvency or similar laws affecting
       creditors rights generally;

       (d)  No legal or administrative proceeding in or of the United States
       of America is pending or threatened that would prohibit it from
       entering into or consummating this Agreement; and

       (e)  Each of the representations made by BUYER and SELLER herein shall
       be true as of the Effective Date with the same force and effect as if
       made on said date.

  8.   SELLER'S REPRESENTATIONS AND WARRANTIES.          SELLER hereby
represents and warrants to BUYER and agrees that:

       (a)  SELLER will convey, assign and transfer to BUYER its contract,
       property and other rights in the Assets;

       (b)  There is no action, suit, proceeding, claim or investigation by
       any persons, entities, administrative agency or governmental body
       pending or threatened against SELLER that may adversely affect
       SELLER's title, and the ability to transfer the Assets to BUYER;

       (c)  SELLER will, for himself, his  successors and assigns, warrant
       and defend the title of BUYER, its successors and assigns to the
       Assets,

                                         5

<PAGE>

       interests and properties against every person whomsoever claiming the
       same or any party thereof by, through and under SELLER, but not
       otherwise; however

       WITH RESPECT TO THE WELLS, EQUIPMENT AND OTHER ITEMS OF PERSONALTY
       WHICH MAY BE COVERED HEREBY, THE SAME ARE USED AND ARE SOLD ON AN "AS
       IS" AND "WHERE IS" BASIS WITH ALL FAULTS, IF ANY.  SELLER SHALL HAVE
       NO LIABILITY TO BUYER FOR ANY CLAIMS, LOSS, OR DAMAGE CAUSED OR
       ALLEGED TO BE CAUSED DIRECTLY OR INDIRECTLY, INCIDENTALLY OR
       CONSEQUENTIALLY BY SAID WELLS, EQUIPMENT OR PERSONAL PROPERTY, BY ANY
       INADEQUACY THEREOF OR THEREWITH, ARISING IN STRICT LIABILITY OR
       OTHERWISE, OR IN ANY WAY RELATED TO OR ARISING OUT OF THIS AGREEMENT.
       SELLER MAKES NO EXPRESS OR IMPLIED WARRANTIES OF ANY KIND, INCLUDING
       THOSE OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE WITH
       RESPECT TO SAID WELLS, EQUIPMENT AND PERSONAL PROPERTY AND EXPRESSLY
       DISCLAIMS ANY WARRANTIES WITH RESPECT THERETO; and

       (d)  The interests which BUYER shall receive shall include production
       or the right to proceeds of production from each well located on the
       ATP and the Leases in an amount which is not less than the percentage
       net revenue interest set forth in Paragraph 2 above.  In addition,
       SELLER represents that the interest to be conveyed, assigned and
       transferred to BUYER shall not require BUYER to bear a greater
       percentage of costs and expenses than the percentage interest set
       forth in paragraph 2, above.  This representation of warranty is by,
       through and under SELLER, but not otherwise; and

       (e)  To the extent of the interest described in paragraph 2, above,
       SELLER has full and complete ownership of the Assets conveyed,
       assigned and transferred hereunder, and that the Assets to be
       purchased by BUYER are free and clear of all liens, judgments,
       mortgages and other burdens or encumbrances created by SELLER.

       (f)  SELLER's contract rights and/or title to undivided interest in
       the Assets has not been forfeited under the terms of the Operating
       Agreement covering the interests and SELLER has not been notified of
       any forfeiture or impending forfeiture of any interest under the
       Operating Agreement;

       (g)  Any credit to the joint operating agreement, resulting from any
       audit of that account or from any judicial action or determination,
       shall

                                         6

<PAGE>

       accrue to the benefit of BUYER without regard to whether the credit
       relates to periods of time before or after the Effective Date; and

       (h)  Upon request by BUYER, SELLER will execute and return to Buyer a
       Notice under the Income Tax Assessment Act of 1997 as amended, section
       330-235, formerly a 124AB Notice under Australia's Income Assessment
       Act.

       (i)  SELLER has paid and discharged all invoices and joint interest
       billings from Operator, and SELLER is not in arrears on any amounts or
       charges of any nature related to the Assets.

       (j)  SELLER acknowledges that as of January 1999, the requisite
       percentage of interest in ownership under the Operating Agreement and
       the requisite number of non-operators voted to remove Tri-Star
       Petroleum Company as operator and to appoint Tipperary Oil & Gas
       (Australia) Pty Ltd as successor operator under the Operating
       Agreement.

  9.   ADDITIONAL WARRANTIES AND REPRESENTATIONS OF SELLER.   Should any of
the purchase price, as described above, be paid in common shares of stock of
BUYER, SELLER makes the following additional warranties, representations and
agreements:

       (a)  SELLER is an "Accredited Investor" as that term is defined in
       Rule 501(a) of Regulation D promulgated by the Securities Exchange
       Commission.  A copy of Rule 501 of Regulation D has been provided to
       SELLER.

       (b)  SELLER has been supplied with information and materials
       concerning BUYER and its business, operations, structuring and
       financing, including its Annual Report on Form 10-K for the Fiscal
       Year Ended September 30, 1999, and its definitive proxy statement
       relating to its Annual Meeting of Shareholders to be held January 25,
       2000.  BUYER has provided SELLER with the opportunity to discuss with
       and ask questions of BUYER's representatives concerning BUYER.  SELLER
       understands that BUYER faces several risks in its business as well as
       risks faced by the oil and gas business and risks described in the
       Form 10-K or incorporated therein by reference.  All information
       requested by SELLER from BUYER or its representatives concerning BUYER
       and the terms and conditions of the Agreement has been furnished to
       SELLER's satisfaction.  SELLER has had the opportunity to ask
       questions of and receive answers from management of BUYER concerning
       BUYER and the terms and conditions of this Agreement, and to obtain
       from BUYER any additional information which BUYER possesses or can
       acquire without unreasonable effort or expense that is necessary to
       verify the accuracy of the information provided to SELLER.


                                         7

<PAGE>

       (c)  Any shares of BUYER acquired by SELLER hereunder are for SELLER'S
       own account and not for or on behalf of any other person or entity.

       (d)  If any shares of BUYER are acquired hereunder, those shares will
       not will not be acquired with a view towards the distribution or
       redistribution with the intent to divide SELLER's participation with
       others.

       (e)  SELLER will only resell any shares acquired under this agreement
       pursuant to registration under the Securities Act of 1933 (the "Act")
       and the laws of any applicable states or pursuant to an exemption from
       registration.  The only registration rights to which SELLER has with
       respect to any shares acquired hereunder are as set forth in the
       Registration Rights Agreement attached hereto as Exhibit "G."

       (f)  The stock certificates representing the shares of BUYER will bear
       a legend substantially as follows:

            The shares represented by this Certificate have not been
            registered under the Securities Act of 1933 (the "Act") and are
            "restricted securities" as that term is defined in Rule 144 under
            the Act.  The shares may not be offered for sale, sold or
            otherwise transferred except pursuant to an effective
            registration statement under the Act or pursuant to an exemption
            from registration under the Act, the availability of which is to
            be established to the satisfaction of the Company.

       (g)  If SELLER receives any common shares of BUYER hereunder, prior to
       any proposed sale, assignment, transfer or pledge of the shares (other
       than transfers not involving a change in beneficial ownership), unless
       there is in effect a registration statement under the Act covering the
       proposed transfer, SELLER shall give written notice to BUYER of its
       intention to effect such transfer, sale, assignment or pledge.  Each
       such notice shall describe the manner and circumstances of the
       proposed transfer, sale, assignment or pledge in sufficient detail,
       and shall be accompanied, at SELLER's expense, by an unqualified
       written opinion of legal counsel who shall, and whose legal opinion
       shall, be reasonably satisfactory to BUYER and addressed to BUYER, to
       the effect that the proposed transfer of the shares may be effected
       without registration under the Act, whereupon the holder of such
       shares shall be entitled to transfer them in accordance with the terms
       of the notice delivered by the holder to BUYER.  Each such notice
       shall also be accompanied by a written

                                         8

<PAGE>

       agreement of the proposed transferee to conform to the requirements
       hereof.  Each certificate evidencing the securities transferred as
       above provided shall bear, except if such transfer is made pursuant to
       Rule 144, the appropriate restrictive legend set forth above, except
       that such certificate shall not bear such restrictive legend if in the
       opinion of counsel for such holder and BUYER such legend is not
       required to order to establish compliance with any provision of the
       Act.

       (h)  SELLER will execute and deliver to BUYER any document, or do any
       other act or thing, which BUYER many reasonably request in connection
       with any acquisition of shares under this agreement.

       (i)  SELLER has not distributed any written materials furnished by
       BUYER to anyone other than SELLER's professional advisors.

       (j)  SELLER represents that the statements made and other information
       provided in this Agreement, and all other information with respect to
       the financial position and business experience of SELLER which has
       been previously supplied by SELLER to BUYER are complete and accurate
       as of the date this Agreement is executed by SELLER, and, if there
       should be any material change in such information prior to the
       acceptance or rejection of this Agreement, SELLER will immediately
       provide revised information to BUYER.

       (k)  SELLER further represents that SELLER is familiar with the type
       of investment which the shares received in compensation hereunder
       constitute.  SELLER believes that any shares received hereunder are
       shares of the kind SELLER wishes to acquire and that the nature of the
       shares received and the amount of the purchase price received in
       shares is consistent with the overall investment program and financial
       position of SELLER.  SELLER's overall commitment to investments which
       are not readily marketable is not disproportionate to SELLER's net
       worth; its investment in BUYER will not cause such overall commitment
       to become excessive; and SELLER can afford to bear the loss of
       SELLER's entire investment in BUYER.  SELLER has adequate means of
       providing for SELLER's current needs and personal contingencies and
       has no need for liquidity in its investment in BUYER.

       (l)  SELLER has such knowledge and experience in financial and
       business matters in general to evaluate the merits and risks of the
       prospective investment and to make an informed investment decision.

       (m)  SELLER understands that no federal or state agency has made any
       finding or determination regarding the fairness of the shares or any
       recommendation or endorsement concerning an investment in BUYER.

                                         9

<PAGE>

       (n)  SELLER represents and warrants that there is no finder's fee or
       commission payable SELLER with respect to its receipt of shares
       hereunder.

       (o)  SELLER understands that no securities administrator of any
       governmental agency has made any finding or determination relating to
       the fairness of this investment and that no securities administrator
       of any state has recommended or endorsed, or will recommend or
       endorse, the offering of any securities received hereunder.

       (p)  The execution, delivery, and performance by SELLER of this
       Agreement are within the powers of SELLER, have been duly authorized
       and will not constitute or result in a breach or default under, or
       conflict with, any order, ruling or regulation of any court or other
       tribunal or of any governmental commission or agency, or any agreement
       or other undertaking, to which SELLER is a party or by which SELLER is
       bound.  The signature of SELLER on this Agreement is genuine, and
       SELLER has legal competence and capacity to execute the same.

  10.  ALLOCATION OF LIABILITY AND INDEMNIFICATIONS.

            (a)  DEFINITIONS.

                 The term "BUYER's Assumed Liabilities" shall mean and include:

                 (i)  All costs, expenses, liabilities and obligations or
                 otherwise agreed to be paid by BUYER pursuant to the terms of
                 this Agreement; and

                 (ii) All costs, expenses, liabilities, claims and obligations
                 arising out of, in connection with, or resulting directly or
                 indirectly from the ownership or operation of the Assets
                 (excluding SELLER's Retained Liabilities), insofar as such
                 claims relate to periods of time subsequent to the Effective
                 Date.

                 The term "SELLER's Retained Liabilities" shall mean and
                 include:

                 (i)  All costs, expenses, liabilities and obligations or
                 otherwise agreed to be paid by SELLER pursuant to the terms of
                 this Agreement; and

                 (ii) All costs, expenses, liabilities, claims and obligations
                 arising out of, in connection with, or resulting directly or

                                         10

<PAGE>


                 indirectly from the ownership or operation of the Assets,
                 insofar as such claims relate to periods of time prior to the
                 Effective Date, and insofar as SELLER knew, or should have
                 known of the such cost, expense, liability, claim and/or
                 obligation.

                 (iii)     All legal fees charged to the joint account and
                 attributable to the interests purchased and sold hereunder
                 prior to the Effective Date;

            (b)  LIABILITIES.  BUYER agrees to assume, pay, perform, fulfill,
            discharge and be liable for all of BUYER's Assumed Liabilities, and
            SELLER agrees to retain, perform, fulfill, discharge and be and
            remain liable for all of SELLER's Retained Liabilities.

            (c)  SELLER'S INDEMNITY. SUBJECT TO THE PROVISIONS OF THE SECTION
            8(a), ABOVE, SELLER AGREES TO DEFEND, INDEMNIFY AND HOLD HARMLESS
            BUYER, ITS OFFICERS, DIRECTORS, AGENTS AND EMPLOYEES, OR ANY OF
            THEM, FROM AND AGAINST ANY AND ALL LOSSES, CLAIMS, SUITS,
            CONTROVERSIES, LIABILITIES AND EXPENSES (INCLUDING, WITHOUT
            LIMITATION, COURT COSTS, REASONABLE EXPENSES OF LITIGATION AND
            REASONABLE ATTORNEY'S FEES) ARISING DIRECTLY OUT OF SELLERS'
            OWNERSHIP OR USE OF THE INTEREST IN THE ASSETS TO BE PURCHASED
            HEREUNDER; PROVIDED, HOWEVER, THAT THIS INDEMNITY SHALL BE LIMITED
            TO THOSE CLAIMS, RIGHTS, DEMANDS AND CAUSES OF ACTION ARISING FROM
            ACTIVITY OCCURRING PRIOR TO THE EFFECTIVE DATE OF THE SALE.

            (d)  BUYER'S INDEMNITY.  BUYYER AGREES TO DEFEND, INDEMNIFY AND
            HOLD HARMLESS SELLER, ITS OFFICERS, DIRECTORS, AGENTS AND EMPLOYEES,
            OR ANY OF THEM, FROM AND AGAINST ANY AND ALL LOSSES, CLAIMS, SUITS,
            CONTROVERSIES, LIABILITIES AND EXPENSES (INCLUDING, WITHOUT
            LIMITATION, COURT COSTS, REASONABLE EXPENSES OF LITIGATION AND
            REASONABLE ATTORNEY'S FEES) ARISING DIRECTLY OUT OF BUYER'S
            OWNERSHIP OR USE OF THE INTEREST IN THE ASSETS TO BE PURCHASED
            HEREUNDER; PROVIDED, HOWEVER, THAT THIS INDEMNITY SHALL BE LIMITED
            TO THOSE CLAIMS, RIGHTS, DEMANDS AND CAUSES OF ACTION ARISING FROM
            ACTIVITY OCCURRING AFTER THE EFFECTIVE DATE OF THE SALE.

  11.  REVIEW AND INSPECTION OF THE ASSETS.    Prior to the Closing, BUYER
shall have the right to perform due diligence review and inspection of the

                                         11

<PAGE>

Assets.  Immediately after Closing, SELLER shall transmit to BUYER all
paperwork, information and data relating to the Assets in the possession of
SELLER (and to which SELLER has the right to possession) including, but not
limited to the following:  (a) financial and accounting records; (b) production,
engineering, geological and geophysical data and reports for the Leases; (c)
copies of engineering, geological and geophysical studies, subject to any
license and non-disclosure requirements; (d) copies of seismic data across any
of the Leases (subject to any license restriction and non-disclosure
requirements); (e) title records, including, but not limited to, copies of the
Leases; (f) correspondence and material and relevant information concerning
pending litigation; (g) regulatory compliance records; (h) contracts between
SELLER and third parties with regard to the Assets; and (i) all correspondence
of any nature relating to the assets, including, without limitation,
correspondence between SELLER and Operator and entities related to Operator,
copies of correspondence between Operator and third-parties and correspondence
of any nature between SELLER and any third party relating to the assets; (j) all
permits and licenses pertaining to the Assets.  Nothing contained in this
paragraph shall obligate SELLER to take any action or expend any money to
acquire anything for BUYER which SELLER does not already have in its possession.
SELLER does not warrant the accuracy of any such material.

  12.  WAIVER.   SELLER and BUYER certify that they are not "Consumers"
within the meaning of the Texas Deceptive Trade Practices - Consumer Protection
Act, Subchapter E of the Chapter 17, Sections 17.41 et seq., of the Texas
Business and Commerce Code, as amended (the "DTPA").  The parties covenant, for
themselves and on behalf of any successors and assignees, that if the DTPA is
applicable (a) the parties are "business consumers" thereunder, (b) each party
hereby waives and releases all of its rights and remedies thereunder (other than
Section 17.555, Texas Business and Commerce Code) as applicable to the other
party and its successors, and (c) each party shall defend and indemnify the
other from and against any and all claims, demands, or causes of action of or by
that party or any successor or any of its affiliates based in whole or in part
on the DTPA, arising out of or in connection with the transaction set forth in
this Agreement.


                             WAIVER OF CONSUMER RIGHTS

       PURCHASER WAIVES ITS RIGHTS UNDER THE DECEPTIVE TRADE PRACTICES -
       CONSUMER PROTECTION ACT, SECTION 17.41 ET SEQ., BUSINESS & COMMERCE
       CODE, A LAW THAT GIVES CONSUMERS SPECIAL RIGHTS AND PROTECTIONS.
       AFTER CONSULTATION WITH AN ATTORNEY OF PURCHASER'S OWN SELECTION,
       PURCHASER VOLUNTARILY CONSENTS TO THIS WAIVER.

                                         12

<PAGE>

  13.  NOTICES.  All communications required or permitted under this
Agreement shall be in writing and communications or delivery hereunder shall be
deemed to have been fully made in actually delivered, or if mailed by registered
or certified mail, postage prepaid, return receipt requested, to the address as
set forth below:

  SELLER:

       RAY W. WILLIAMS
       1067 Los Jardines Circle
       El Paso, Texas
       79912
       Telephone:     915-581-4337
       Facsimile:     915-581-3565

  BUYER:

       TIPPERARY COPORATION
       633 Seventeenth St., Suite 1550
       Denver, Colorado  80202
       Attention: Mr. David L. Bradshaw, President
       Telephone:     (303) 293-9379
       Telecopier:    (303) 292-3428

  14.  GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, EXCLUDING, HOWEVER, ANY
PROVISION OF THE TEXAS LAW THAT WOULD REQUIRE THE APPLICATION OF THE LAW OF A
DIFFERENT JURISDICTION.

  15.  FURTHER ASSURANCES.  Incidental and subsequent to Closing, each of the
parties shall execute, acknowledge, and deliver to the other such further
instruments (including any stamp duty or other form necessary for, or incident
to, the notation, sanction, approval, transfer or assignment to BUYER of any
title or interest in either the Assets or the Operating Agreement), and to take
such other actions as may be reasonably necessary to carry out the provisions of
this Agreement.

  16.  GOVERNMENT APPROVALS.    SELLER will cooperate with BUYER, in a timely
manner (both before and after closing), in obtaining any necessary or desired
consents or approvals of the Government of Australia or any state thereof,
including, without limitation, the execution of any documents necessary (in the
opinion of BUYER and its counsel) to obtain any consent or approval of interests
arising under the Operating Agreement, or to perfect the title of BUYER or
SELLER in the Assets and/or to obtain any necessary governmental sanction of the
Operating Agreement.

                                         13

<PAGE>

  17.  EXPENSES. Whether or not the transactions contemplated by this
Agreement are consummated, each of the parties hereto shall pay its own fees and
expenses incident to the negotiation, preparation and execution of this
Agreement, including attorney's and accountant's fees.

  18.  EXISTING RELATIONSHIP.   SELLER and BUYER are co-signatories to the
JOA and co-owners in the various rights, interests, contracts and agreements
which, as to SELLER's interests, constitute the Assets.  As such, BUYER AND
SELLER have equal rights to information relating to and concerning the assets
and operations.  To the extent SELLER may have been provided with information
that has not been provided to BUYER, however, he will provide such information
to BUYER prior to the Closing Date.  SELLER acknowledges that he is experienced
and knowledgeable in the oil and gas industry, and has relied solely on his own
legal, tax and other professional counsel concerning this Agreement.

  19.  EXHIBITS. All exhibits to this Agreement are incorporated herein by
reference.

  20.  SUCCESSORS AND ASSIGNS.  The terms, covenants and conditions hereof
bind and inure to the benefit of BUYER and SELLER and their respective
successors and assigns.  This Agreement shall be freely and fully assignable by
BUYER.

  21.  CONFLICTS.     In the event of a conflict between this Agreement and
the terms and conditions of the Operating Agreement, the provisions of the
Operating Agreement shall prevail.  In all other respects, this Agreement shall
supersede all prior agreements between the parties hereto regarding the subject
matter hereof, whether written or oral.

  22.  SURVIVAL. The covenants, obligations, indemnities, representations and
warranties included in this Agreement shall survive the Closing and remain
actionable thereafter.

  23.  PRODUCT OF NEGOTIATION.  This Agreement is the product of negotiation
between BUYER and SELLER.  No fiduciary duty, if any, owed by BUYER and SELLER
in any prior agreement shall apply to the process of negotiation of this
Agreement.

  24.  EXECUTION, COUNTERPARTS AND EXHIBITS.   BUYER and SELLER acknowledge
and agree that this Agreement may be executed in any number of counterparts,
each of which shall be an original, but all of which together shall constitute
one instrument, and that a facsimile copy of this Agreement, and of a signature
to this Agreement, shall be valid and binding as an original.  BUYER and SELLER
also acknowledge and agree that they are each in possession of the Exhibits
referred to herein as "A" - "E," and each party shall be responsible for
attaching copies of such exhibits to

                                         14

<PAGE>

executed copies of this Agreement. Exhibits "F" and "G" have been provided to
SELLER by BUYER, and shall be attached to this Agreement at the time of
execution.

  IN WITNESS WHEREOF, this Agreement has been executed by the parties before
the undersigned competent witnesses on the dates indicated below.





SELLER:                              BUYER:

RAY W. WILLIAMS                      TIPPERARY CORPORATION


By: /s/ Ray W. Williams              By: /s/ David L. Bradshaw
   ---------------------------           -------------------------------------
    Ray W. Williams                      David L. Bradshaw
                                         President and Chairman of the Board

                                     ATTEST:

                                     By: /s/ Elaine R. Treece
                                         -------------------------------------
                                         Elaine R. Treece, Corporate Secretary

ATTEST:                              ATTEST:



By: /s/ Michelle Rane                By: /s/ Pam Surabian
   ----------------------------          -------------------------------------

                                         15

<PAGE>


STATE OF CALIFORNIA        s
                           s
COUNTY OF Riverside        s


  The foregoing instrument was acknowledged before me on this the 14th day
January, 2000 by Ray W. Williams, as Seller.

Witness my hand and official seal.



                                /s/ Pam Surabian
                                ------------------------------------------
                                Notary Public
                                THE STATE OF CALIFORNIA

My Commission Expires:

5-11-03



STATE OF COLORADO     s
                      s
COUNTY OF DENVER      s


  The foregoing instrument was acknowledged before me on this the 14th day of
January, 2000 by David L. Bradshaw, President of Tipperary Corporation, on
behalf of said corporation, as Buyer.

Witness my hand and official seal.



                                /s/ Phyllis Kajiwara
                                --------------------------------------------
                                Notary Public
                                THE STATE OF COLORADO

My Commission Expires:

7/31/2002

                                         16